Standing Committee B

[Mr. John McWilliam in the Chair]

Proceeds of Crime Bill

Clause 421 - Disclosure of information to Director

Amendment proposed [this day]: No. 606, in page 245, line 1, leave out subsection (9). -- [Mr. Grieve.] 
 Question again proposed, That the amendment be made.

John McWilliam: I remind the Committee that with this we are taking the following amendments: No. 631, in page 245, line 3, leave out 'an' and insert
'a District Tax Inspector or higher grade'.
 No. 627, in page 245, line 5, after 'a', insert -- 
'collector or higher grade'.
 No. 607, in clause 422, page 245, line 17, leave out paragraph (b). 
 No. 608. in clause 422, page 245, line 19, leave out subsection (4). 
 No. 632, in clause 422, page 245, line 21, leave out 'an' and insert -- 
'a District Tax Inspector or higher grade'
 No. 628, in clause 422, page 245, line 23, after 'a', insert -- 
'collector or higher grade'.
 No. 619, in clause 425, page 247, line 27, leave out subsection (9). 
 No. 633, in clause 425, page 247, line 29, leave out 'an' and insert -- 
'a District Tax Inspector or higher grade'.
 No. 629, in clause 425, page 247, line 31, after 'a', insert -- 
'collector or higher grade'.
 No. 620, in clause 426, page 248, line 3, leave out subsection (4). 
 No. 634, in clause 426, page 248, line 5, leave out 'an' and insert -- 
'a District Tax Inspector or higher grade'
 No. 630, in clause 426, page 248, line 7, after 'a', insert -- 
'collector or higher grade'.

David Wilshire: Before I was rudely interrupted at 11.25 this morning, I was making some relevant and informative points. [Interruption.]

John McWilliam: Order. The hon. Gentleman is entitled to be heard, no matter how facetious he may be.

David Wilshire: I am grateful to you for that ruling, Mr. McWilliam. Some Labour Members found what I
 had to say this morning not to their liking. I was referring to important matters, but they fell on ears that did not want to hear.
 This morning's debate was about whether to delete the power to have other people undertake duties for the commissioners or whether it should be specified who, on behalf of the commissioners, could exercise that power. I hope that, during the lunch break, the Minister reflected on those two choices. As I suggested earlier, probably the best course of action is that the commissioners make such decisions. The powers of disclosure run counter to many of the customs of this country. We have always prided ourselves on saying that a particular investigation will be specific if it is carried out by, say, the Child Support Agency or the Inland Revenue. There will be an end to it and there will be confidentiality within the investigation. 
 We are now saying, however, that there will be the passing of information. I am not sure that I object to that in principle. All of us have had experiences when it would have been much more sensible if only the national insurance contributions computer had spoken to the Child Support Agency computer. I can understand that argument, but the Bill is a great departure from the way in which such matters have been handled in the past. It probably is right for the cross-fertilisation of information that such a decision should be made at the highest possible level. Amendment No. 606 would make it clear that the commissioners themselves should make such a decision. 
 I understand only too well that it could be argued that the commissioners have so much else to do that delegation would happen at the end of an agenda, and if there was a large number of requests, there would be neither the time nor the inclination other than to rubber-stamp them. My hon. Friend the Member for Beaconsfield (Mr. Grieve) rightly said that rubber-stamping was the last thing that we needed. If that argument does not find favour with the Minister, amendments Nos. 631 and 627 are the alternatives. I said to the Committee before lunch that I took personal responsibility for selecting the district tax inspector or a collector of taxes. Perhaps that is not the appropriate grade of officer, but it is important to explain why I chose that grade. It was born of my knowledge and experience of dealing with tax inspectors and Customs and Excise. When I ran my own business, not only was I registered for VAT, but I go back to the dim and distant past of being registered for purchase tax. 
 In the case of both my VAT and my purchase tax affairs, I saw how the system worked. There was always a raft of Customs officers doing all sorts of things. Sometimes I would see one, and sometimes another. My constituency work involves me closely with Heathrow and its customs operations. There is not necessarily consistency in who deals with what. 
 Such decisions will be delegated to an individual Customs officer if the amendment is not accepted. It is possible that on, say, Mondays, Wednesdays and Fridays, one person might apply his mind to it, and on Tuesdays, Thursdays and Saturdays, the person involved might be someone else. There will not 
 necessarily be consistency in decisions or depth of experience from an individual Customs officer. 
 In my own experience, and from my experience of speaking to people, when a serious issue arises, whether in relation to the collection of tax or, as in this case, in deciding whether to disclose information, all individual Customs officers will ultimately defer to their collector, who has a consistency of view, knows the overall workings of the system and what individual officers are doing, and can examine their work and arrive at a clear, balanced and consistent point of view. That is why I chose a collector. It is the lowest grade of which I am aware that involves consistency and personal involvement at a senior level in difficult issues. 
 I readily accept that the Minister may say that the collector is the wrong person. I am not aware of the grades, ranks and hierarchy of the upper echelons of Her Majesty's Customs and Excise. I am pleased to say that I have never had to tangle with that level of Customs and Excise, which is a plus, rather than a minus. It might be argued that the collector would not be the appropriate person. 
 The same arguments apply to the district tax inspector. My experience over the years of running my own businesses has brought me into contact with assorted tax inspectors, as is inevitable. Whether or not they run businesses, hon. Members will, because of our salaries and allowances, have come into contact with tax inspectors of one sort or another. The same principle applies. It is possible to come into contact rapidly with several inspectors in the same tax office. Sometimes they apply one way of thinking, sometimes another. My experience has taught me that, in the event of a serious issue to settle, a matter of principle, or a decision to be made on how to proceed, ultimately the district inspector in the tax office will have the file on his desk and can be asked to ensure that consistency is upheld and that the rules are applied. 
 If the Minister's argument is that the commissioners themselves could not cope with the work involved and that it should be delegated, and if he wants the amendments to be dropped or his colleagues to vote against them, he needs to reassure the Committee that handing the power to every Customs officer and tax official is justifiable and will not lead to inconsistency and, at worst, abuse or lack of experience leading to the wrong conclusion. He must deal with that question. There should be some consistency and control. I have no figures for the number of tax inspectors or Customs officers, but I expect that there are quite a few. I do not believe that such a power should be handed out to the many thousands of people who are bound to be involved. I imagine that the number of times that the power will be exercised will not be in the thousands, although it might well be in the hundreds in the course of time. It is not unreasonable to ask that the exercise of such a power be confined to senior officers in Customs and Excise and the Inland Revenue. I look forward to hearing the Minister's comments.

Bob Ainsworth: Amendments Nos. 606 and 619 would limit disclosure to those authorised personally by the Commissioners of Inland Revenue or Customs and Excise. Amendments Nos. 608 and 620 would similarly restrict the power to consent to further disclosures. That would be impractical and bureaucratic. It would limit the numbers of disclosures that are possible, and could introduce unhelpful delays into the process.
 For example, there are only five individuals who are Commissioners of Inland Revenue. It would not be a good use of their time to authorise every disclosure. The delegation of the authority to disclose will be to specialist staff who will be adequately trained and supervised, and subject to strict statutory rules of confidentiality. I think that the hon. Member for Spelthorne (Mr. Wilshire) adds another argument to that, because there would be a potential for a lack of quality if powers were delegated too far up. He knows how these things work, and he made goods points about ends of agendas.

David Wilshire: The Minister seeks to reassure me, but he may have a different copy of the Bill from mine. There is no provision in my copy to ensure that delegation shall be to a specialist who is properly trained. If the Bill said that, I could accept his comments. If he thinks that my argument is right, will he, after rejecting these amendments, table another that says exactly what he just offered?

Bob Ainsworth: Hold on.
 Commissioners of Customs and Excise would normally delegate their authority to commissioned Customs officers. Delegation will be at the discretion of the commissioners concerned. The provision that requires special treatment for these forms of information reflects the particular sensitivity of the information to the Revenue and Customs and Excise. We are, therefore, justified in being confident about how they will use their powers of delegation. 
 Amendments Nos. 627 and 634 are alternatives to those that I already mentioned, because they would not remove the power to delegate but establish that delegation must be to only a specific rank. Amendments Nos. 631 to 634 would mean that the Commissioners of Inland Revenue could delegate the power to disclose or further delegate information to a district tax inspector or higher grade only. Amendments Nos. 627 to 630 would mean that Customs delegations could be made only to a collector or higher-grade Customs officer. 
 The same arguments apply here as those that I made in response to the other amendments in the group. The resulting system would be bureaucratic and lead to delay. Both Revenue and Customs officers are able to take the responsibility for authorising disclosure. They do not see the need to make that a matter for a higher-grade officer. 
 Opposition Members mentioned our Revenue. It may be dangerous for politicians to become great fans of the Revenue, but it operates its rules and confidentiality to a high standard, and we want to hang on to that. Do we want our legislation to show 
 confidence in organisations' ability to deal with matters appropriately and to delegate to specialist officers with the necessary training and commitment to confidentiality? Alternatively, do we think that the organisations will delegate responsibility to people who, as the hon. Member for Spelthorne said, are not at work on Tuesdays, Wednesdays and Fridays, and who have not received any training and are not capable of the task? 
 Do we want to lay out a bureaucratic stricture in legislation, or are we confident that the organisations can deal with confidential information and pass it on appropriately? Everything that has been said seriously in Committee shows that we do have confidence that the organisations will deal with matters appropriately, and that the Revenue cherishes its reputation for handling confidential information appropriately. The Revenue will not put that at risk by delegating the powers inappropriately. 
 Amendment No. 607 would limit cases of onward disclosure of taxpayer information that is consented to by the Commissioners of Inland Revenue or Customs and Excise to a case-by-case consideration. Again, that would be impractical and unnecessarily bureaucratic. In addition to case-by-case consideration by the Revenue or Customs and Excise, there may be circumstances in which the nature of disclosure follows a similar pattern. Clause 422(3)(b) provides for the Revenue or Customs and Excise to consent to further disclosures of a kind, rather than requiring them to consent to disclosure repeatedly in very similar circumstances. The provision provides flexibility. If the Revenue or Customs and Excise consider that a case-by-case consideration is warranted, they can, and will, adopt that approach. We will not tell them that they cannot.

Boris Johnson: How often does the Minister suppose that the Revenue would disclose details of people's tax affairs to the director? If that would be very rare, and there would be only half a dozen such instances a year, why should the function not be exercised by the commissioners?
 Sitting suspended for a Division in the House. 
 On resuming--

Bob Ainsworth: The hon. Member for Henley (Mr. Johnson) was asking a question that has already been raised: how often would the powers be used? That is obviously of interest to the Committee, and it would be nice to be able to pin down how many times they would be used. We said earlier that we envisaged civil recovery being used about 20 times a year, and we do not envisage the taxation powers in clause 311 being used much more often than thatperhaps 30 times a year.
 It is not possible to say how many times it might be appropriate for the director to approach the Revenue for tax information when dealing with confiscation or civil recovery cases. He will be able to do so only when appropriate. The commissioners will consider the information that he asks for and check whether it is 
 appropriate, and they will not disclose it if it is not. It would not be possible to give the hon. Member for Henley--had he been here--or anyone else a detailed analysis of how many times disclosure of information from the Revenue will be required. 
 We must get the director in place, establish the Assets Recovery Agency, set up the memorandum of understanding, and develop a method of working together. That is why I put such emphasis on the need within the agency for a culture that maintains the credibility of both the agency and the system, and has the high degree of credibility that those with which the agency will deal already have.

David Wilshire: I am a little concerned that the Minister says that he has no idea how often the power will be used. I suspect that that is correct, because I have learned that the Government sometimes do not do their homework. There was a money resolution for the Bill, so calculations must have been made. Perhaps he could confirm that. If the power will be used thousands of times a year, we would need more officers to do the work, and that would cost money. The money resolution must have made some assumptions about the work involved.

Bob Ainsworth: The hon. Gentleman is right to say that there was a money resolution, and that in order to justify it, a broad assessment was made of the volume of work that the agency would do.
 We said that we envisaged that there would be about 250 cases a year in which confiscation would be handed on from the prosecuting authorities to the agency because they thought it necessary to use the agency's specialist skills. I think that that included about 20 to 25 civil recovery cases and a few more--perhaps 20 to 30--tax cases. It was not possible or necessary, when creating a regulatory impact study and a money resolution, to try to guess how many times those cases would involve requests to the Revenue for information. 
 It would be extremely difficult to be accurate about the number. If I were to try to give the hon. Gentleman an indication about that--based on how many confiscation cases were being heard, and whether repeat requests might arise as they progressed--it would be little more than a work of fiction, and that would be pointless. 
 I ask the Committee to accept that some common sense exists within the Revenue. The system will be set up under a memorandum of understanding. It would not be in the interests of the agency, the Revenue or Customs and Excise to delegate those powers to people who are not proficient or properly trained, and they certainly would not delegate them to people who were not committed to rules of confidentiality. 
 The key issue is whether we want to tie the organisations' hands, by telling them how they should delegate the powers. Do we wish to limit by statute how the Revenue organises its affairs, with regard to its dealings with the agency? That is the question that we should answer, because it addresses the substantive point. 
 The amendments would remove or restrict the powers to delegate the responsibility for authorising and consenting to disclose. That could cause delay and lead to the disclosure of the director operating less than effectively. We believe that it is justified to have confidence that the organisations concerned will use the powers appropriately.

Dominic Grieve: The Minister has responded carefully to questions about several issuesand especially powers of delegation.
 Amendment No. 607 concerns a slightly different matter. It deals with whether the Inland Revenue or Customs and Excise should be able to give a blanket right of further disclosure to the director, instead of each case being dealt with on its individual merits. As the debate has progressed, that has become the provision that troubles me most. I have not been convinced that it is necessary, particularly in the light of the number of cases that are likely to arise. One must bear it in mind that disclosure onward from the director can extend beyond the Government service, and out to a foreign country. That is why I am particularly concerned. Will the Minister comment on that?

Bob Ainsworth: My response to that is broadly the same as to the previous matter. The Commissioners of the Revenue are not required to give a blanket right of further disclosure. They would consider giving that right only if the business that they were conducting with the director indicated that it would make a lot of sense to do that. If they were receiving repetitive requests that fell into exactly the same area, it might appear to be common sensefrom the points of view of themselves and the directorto grant coverage of a class of requests, rather than to continue to address cases on an individual basis.
 The key issue is the same as it was with regard to the previous matter. I believe that we should be confident that the relevant organisations can exercise that power in a correct and appropriate manner. The hon. Gentleman believes that we should pin them down by insisting that cases are addressed on an individual basis. If we did that, we would, in effect, be saying to the Commissioners of the Inland Revenue that we do not care if, under certain circumstances, it becomes apparent to them that it would be common sense to grant class coverage. 
 I might be able to give the hon. Gentleman an example of specified circumstances. It could be said that that would be best for details about location--latest home address, latest employer's address, place of work--when assisting a criminal confiscation investigation. When there are criminal confiscation proceedings, do we want to prevent the commissioners from releasing details--with appropriate safeguards--of a person's last known place of employment? Do we want to insist that they look at every single case, and under no circumstances release those details, even if, after working with the agency for some time, it would clearly be sensible to do so? I am not sure that that is what Opposition members really want to do, and I ask 
 them to think seriously about the amendments that they have tabled.

Dominic Grieve: I am grateful to the Minister for treating the amendments seriously, because certain issues needed to be addressed. He has persuaded me that it would be wrong to press to a Division an amendment that fetters the ability of the board to delegate. If the intention is for delegated officers with expertise within the Inland Revenue and Customs and Excise to deal with such applications, I am confident that they will be able to do so.
 The issue raised by amendment No. 607 is slightly different. I regret that I did not table a similar amendment to the Scottish provision, so we have only the England and Wales and Northern Ireland provision to go by. I fully understand the Minister's point. The scope for a generic right to make an onward disclosure could be confined to particular types of information, such as a name and address. We are dealing not with disclosure to the director but with the director's right to make use of that information subsequently, without going back to the Revenue for authorisation. There are some important provisions under clause 423. It is clear that the director may want to use the information in various ways, including those that will enable him to carry out his functions. I have no difficulty with that, because it is axiomatic that the director will obtain the necessary information to perform those functions. 
 In addition, the provision extends to criminal proceedings in the United Kingdom, a subject that we will later discuss in principle. It places the director in a potentially advantageous position over other law enforcement authorities, in terms of obtaining evidence from the Inland Revenue for subsequent use. I am well aware that there are circumstances in which the Inland Revenue could be requested to provide information to law enforcement authorities that--under the current provisions--they might not otherwise have been able to obtain. That troubles me, especially if that information can be transmitted without its being looked at again and approved by the Inland Revenue or Customs and Excise, even if it is innocuous and generic, such as a name and address. 
 Even more pertinent are potential proceedings outside the United Kingdom, which would effectively be the transmission of that information to a foreign Government or law enforcement agency. The Minister will remember that, in a previous debate, I expressed my worry that human rights could be infringed if the foreign Government to whom disclosure was made were less scrupulous or less respectful than we are of those rights. That is a subject for concern, particularly with information on taxation. 
 I can think of instances in which a person might have ''trouble'' with foreign tax enforcement authorities. The oppressive nature of the regime with which they were dealing would then give rise to serious hesitation about whether one should supply information to that country for the sake of obtaining that person's assets, which may be abroad. That information may relate to the commission of offences, 
 but sometimes the two might be difficult to disentangle. I can easily imagine an unscrupulous Government masquerading a request for information on an alleged serious offence such as drug trafficking as a request for information for other purposes. Their allegations may not be justified. 
 I do not say that we should not give that information, but I should be unhappy if information relating to the confidential relationship between a citizen and the Inland Revenue were passed abroad under a generic heading without the Inland Revenue necessarily having the chance to reconsider that decision.

Bob Ainsworth: I am following the hon. Gentleman's point, and he has raised genuine issues for concern. I wonder if he could focus his argument. Why does he think that there is a particular problem in relation to tax? I foresee that the same issues could arise under foreign jurisdictions with almost any information that we were to pass to them. I am struggling to understand why tax is separate or different.
 To what degree would individual approval by the Revenue give additional protection in the circumstances that he, quite rightly, worries about? To what extent should we trust the director and to what extent should we worry about human rights, rights in relation to self-incrimination and the comeback on those issues? To what extent do we think that referral back to the commissioner will add something?

Dominic Grieve: I do not want to get dragged into a general discussion of the powers under clause 423(1)(h) if I can avoid it. We shall come to that subject shortly.
 The Minister is right that there are issues about disclosing any information that the director may have to hand to a foreign Government, because the director then ceases to have control of it. It could be used against the person concerned or others in a way that infringes, for example, human rights legislation in this country. Clearly, with some foreign countries, that risk is considered minimal, but even some of our European neighbours' track records in criminal investigation are, I regret to say, not very good. It is often a subject for discussion in their newspapers that the activities of their investigating magistrates, for example, turn out to be oppressive. We have criticisms of our system, too, but one has only to consider the nature and quality of some of the criticisms made in Europe to feel anxiety about the way in which some foreign countries, including some quite close to us that are regarded as democracies, enforce criminal law. 
 I shall focus on the specific question of why the Inland Revenue, or Customs and Excise for VAT, should be different. The Minister has acknowledged the difference by requiring that certain bodies give authorisation for disclosure under the clause; subsection (8) specifies the commissioners. For some reason, the Minister and the draftsman have considered that there should be special safeguards for tax material. I always understood that that is because of the special nature of the relationship of 
 confidentiality between individuals and the bodies to which they pay their tax. That is well established in this country. 
 The Minister has acknowledged, owing to the way in which the clause is drafted, that the tax information that is likely to come to the Commissioners of Inland Revenue or Customs and Excise is treated as a special category. If I identify that that is a special category for onward transmission from the director, the Minister, in logic, must agree with me. If information was a special category when it was given to the director, surely it should remain a special category when it is in the director's hands. 
 That is acknowledged by the way in which clause 422 is drafted. That clause relates to further disclosure if information comes from the Inland Revenue or Customs and Excise. The Minister offered an attractive argument that we are discussing generic matters such as names and addresses, which may sound relatively innocuous and straightforward. However, that does not detract from the fact that the information originated in the confidential relationship between the individual and the Revenue or Customs and Excise. In such circumstances, there should not be a generic disclosure clause. 
 In the case of onward transmission from the director, he should return to the two bodies and say, ''You supplied me with information about Mr. Bloggs's tax affairs. I think that this would be very useful to the German authorities in the money laundering proceedings that they are to bring against him. Do you agree that it should be disclosed?'' The Revenue, with its Revenue hat on, would have a further opportunity to refuse that, if it had good reasons to do so, rather than giving a blanket permission, which could lead to difficulties. 
 If the number of cases will be as small as the Minister suggested, that would not cause a serious problem. It would mean only that after the Revenue gave information and generic guidelines to the director, it would not lose control of the information in a manner that could be held against it. I am worried about its reputation.

Bob Ainsworth: And so should we be, but the hon. Gentleman tries to use the Bill's structure against my argument. The worries of the Revenue and Customs about ensuring their reputation for confidentiality and control of information has affected the way in which information is protected by the Bill. The same commissioners who have those worries are those who will agree any methodology that allows the generic transmission of onward information.
 If we try to extend the culture of confidentiality beyond the director, I do not know what we would add to the Bill by providing that even if the commissioners are comfortable, in given circumstances, to give generic permission for onward transmission, we should say, ''No. Even if you feel that you are comfortable, we can't allow you to enter into such an arrangement.'' I understand that the hon. Gentleman is making a serious point, but I struggle to understand why he thinks that the very people who insist on confidentiality and who were involved in 
 drafting the Bill would enter into such generic arrangements that would damage their reputation.

Dominic Grieve: I very much hope that they would not. I have paid compliments to the Inland Revenue and its attitude, born of my experience of prosecuting on its behalf. Perhaps the Minister will say that the Revenue asked for clause 422(3)(b), but I cannot help thinking that it is not necessary at present. If the director wishes to make use of such information, it is said that he must first gain permission to do so, but given the volume of disclosure that is likely to take place, the Committee may be more comfortable if such matters are dealt with case by case, for no other reason than that an individual taxpayer's affairs are ultimately thatindividual.
 The trouble with generic disclosures is that, when someone has tried to identify a category and says that, in the case of names and addresses, for example, the person need not bother to come back, the issue tends to be forgotten about until something goes wrong. Someone will say, ''I think I made a mistake, so we should change the category.'' That mistake might not have happened if there had been a process by which it can be said, ''In the case of Mr. Bloggs, can we do this?'' 
 The matter cuts both ways. It is difficult to see that a greater burden will be placed on either the director or the Revenue if clause 422(3)(b) is deleted. In the absence of a cogent argument against that, I am minded to press amendment No. 607 to a Division to register our concern. The Opposition are unlikely to win the vote, but will the Committee consider whether it is appropriate, in the case of tax affairs, which we have decided to treat particularly carefully, that there should be a right of onward information provision by the director, without the Inland Revenue being asked about it? I shall withdraw amendment No. 606 and press amendment No. 607 to a Division. I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn. 
 Clause 421 ordered to stand part of the Bill.

Clause 422 - Further disclosure

Amendment proposed: No. 607, in page 245, line 17, leave out paragraph (b).--[Mr. Grieve.] 
 Question put, That the amendment be made:--
The Committee divided: Ayes 6, Noes 15.

Question accordingly negatived. 
 Question proposed, That the clause stand part of the Bill.

Dominic Grieve: We have clearly covered a lot of ground on the clause. Let us consider subsection (6). It states:
A permitted person who discloses such information to the Director may make the disclosure subject to such conditions as to further disclosure by the Director as the permitted person thinks appropriate; and the information must not be further disclosed in contravention of the conditions.
 My question relates to the exchange of information with foreign countries. How will the effect of subsection (6) be guaranteed?

David Wilshire: I had not considered that. I shall be interested to hear the answer.
 Other aspects of subsection (6) worry me. It refers to conditions such as the person involved wants to attach. What sort of conditions does the Minister have in mind? The explanatory notes, to which I referred for guidance, give as an example ''sensitive operational details''. It occurs to me that this is a Pollok-type issue--a possible loophole. Is the Minister suggesting that information providers--which I imagine might include the intelligence services, as they were mentioned this morning--might for operational or sensitive security reasons attach a condition that the information cannot be passed on and therefore cannot be used? If so, might we be creating a loophole? 
 We now know, and the world will know, because it will be able to read the explanatory notes and the debate, including the Minister's comments, that if you can organise your laundering of money, or whatever else it is that you do, in such a way that somehow--

John McWilliam: Order. I have never laundered money in my life. The word ''you'' refers to the Chair.

David Wilshire: Yes, I was getting carried away. The enthusiasm of my argument led me not to think too carefully about how I phrased it. I shall slow down and measure my words with more care.
 My point was not that you, Mr. McWilliam, would launder money, but that it would be possible for someone to spot a possible loophole and say, ''I want to launder money''--I have not laundered money, but ''I'' is easier, and will not fall foul of your strictures--''and if I can involve a sensitive security matter in the process, I might get away with it, because the person who wants to release information will have to attach conditions that specify that it cannot be used.'' Is that really what the Minister wants? Is he suggesting that if we can find an embarrassing, awkward, secretive way of doing it, it will be impossible to pass on the information? What does he have in mind? 
 The provision might provide a loophole for the prosecuting authorities, and I am sure that that was not intended. What would happen if the person released the information but the attached condition was a ban on releasing it to a court or to the defendant's lawyers? Under the provision, such a condition could be attached. Nothing excludes it. 
 We return to the issues with which we dealt this morning. I shall not repeat them, but people cannot unknow what they know. 
 Under the provisions, it is perfectly possible, if the information is sensitive or embarrassing, to allow the release of information to the director on condition that he not release it to the defendant's lawyers. What would happen? The prosecution would proceed, and the defendant would not know what the information was. People would not necessarily rely on it in giving evidence, but it would underpin the arguments developed, and great strength would be drawn from being able to use that information but being under an obligation not to pass it on. If it were to crop up in the future, the prosecuting authorities, the director--or whoever else--could say, ''Yes, I realise that it probably could have been passed to the defence, and that it probably should have been, but this Act prevented me from doing that.'' Would we not then have handed to the prosecuting authorities and the director a good way of ensuring that justice is not done? 
 With regard to many of the Committee's discussions, there has been an underlying sense that we are stacking the odds so much in favour of the state, the prosecuting authorities or the director that we are undermining the principles of justice. I am sorry that the hon. Member for Glasgow, Pollok (Mr. Davidson) is not present, because he would have wished to have intervened on that point, and I would have been happy to tell him, yet again, that he is wrong--that he does not need to try to create a Gestapo state to look after those of his constituents who get done over by drug barons. 
 Will the Minister provide examples of the conditions that might be attached? I want him to reassure us that we are not creating a loophole, by allowing the security services to withhold information, whereby criminals could avoid prosecution by doing things in such a way that the authorities would not act, because they would not be prepared to release certain kinds of information. Above all, I want him to explain why I should not be worried about information being withheld from the court and from defendants.

Bob Ainsworth: I struggle to see the relevance to the clause of many of the hon. Gentleman's commentsalthough they might be relevant to other clauses.
 This clause sets out provisions that restrict the further disclosure of information that has been disclosed to the director. It does nothing else.

David Wilshire: The Minister has answered his own question. He said that he does not see the relevance of my remarks, and that is my point. The clause allows someone to pass information to another person, on the understanding that it is not to be passed to anyone else. For instance, I might pass information to the Minister and say, ''You can know it, but you cannot pass it on to a third party.'' That is what I am concerned about.

Bob Ainsworth: We are not talking about him and me, we are talking about the Revenue and the director. They represent public bodies that are accountable in different ways.
 The point of the provision is straightforward: if a person or an organisation hands information to the director, that person or organisation is entitled to say to whom, and in what circumstances, he can pass it on. In other words, certain proprieties would be attached to such information. I thought that the hon. Gentleman would support that. If the Revenue gives information to the director, it will want to know that he has a good reason for asking for it, and how he will use it, and what led him to make the request. If he wishes to pass that information to someone else, the Revenue will want to be satisfied that it has some control as to the circumstances in which he will do that, so that it can impose conditions, if that is thought to be necessary. The provision enables the Revenue to do that. 
 On the extent to which the passing on of information will be controlled, the hon. Member for Beaconsfield raised a point about foreign powers. The restrictions will be imposed on the director, rather than on the foreign Government--or tax authority, or prosecuting authorities. Those restrictions address how, in what way, and with what limitations, the director can further disclose. We have effective control of the way in which he will conduct his business, and he will be obliged to comply with the restrictions that are placed on him.

Dominic Grieve: Of course, I understand that. Let us supposed that a restriction on further disclosure has been imposed on the director. If he intends to make a disclosure to a foreign Government, he will be in a position where he cannot make that disclosure.

Bob Ainsworth: Possibly.

Dominic Grieve: Or, if he makes the disclosure, there must be a risk that the information will be used subsequently by a foreign Government in a way other than that which the director had undertaken. In such a case, there will be criticism of the way in which the system works.
 I accept that part of the argument may be more sensibly discussed under clause 423, because such issues are closely linked. Restrictions may be imposed, but by their very nature it is difficult to see how the director can exercise any control over that further disclosure and how it might be used.

Bob Ainsworth: In any disclosure made by the director when he has obtained information from elsewhere, it is not only he who should be aware of how it could be used. The person who gave him the information in the first place will also bear in mind how it should be used and is entitled to put restrictions on his disclosure. The point made by the hon. Gentleman about potential abuse is outwith that issue.
 Question put and agreed to. 
 Clause 422 ordered to stand part of the Bill.

Clause 423 - Disclosure of information by Director

Dominic Grieve: I beg to move amendment No. 609, in page 245, line 37, leave out paragraph (a).

John McWilliam: With this it will be convenient to discuss the following amendments: No. 617, in page 245, line 37, leave out 'or may be'.
 No. 610, in page 245, line 39, leave out paragraph (b). 
 No. 621, in clause 427, page 248, line 24, leave out paragraph (a). 
 No. 622, in clause 427, page 248, line 26, leave out paragraph (b).

Dominic Grieve: We now come a series of amendments that deal with the further disclosure by the director. Subsection (1) states:
Information obtained by or on behalf of the director in connection with the exercise of any of his functions may be disclosed by him if the disclosure is for the purposes of any of the following--
(a) any criminal investigation which is being or may be carried out, whether in the United Kingdom or elsewhere.
 Amendment No. 609 would delete paragraph (a). Amendment No. 617 would retain that paragraph, but remove the words ''or may be''. A further amendment is consequential and deals with Scotland. 
 However, what I am asking the Committee to think about is the criminal investigations that may be carried out in the United Kingdom or elsewhere. Paragraph (b) deals with proceedings that have already been started in the United Kingdom or elsewhere.

David Tredinnick: Does my hon. Friend agree that it is not the purpose of the Bill to deal with prosecutions for crime generally? Subsection (1)(a) appears to widen the scope of the Bill.

Dominic Grieve: I agree. The intention of the Bill is to deal with the proceeds of crime. That raises the issue of the confiscation of assets from those who have been convicted and have a criminal lifestyle. There are also issues of civil recovery and the taxation of people against whom nothing can be allegedand no civil recovery or confiscation can be madebut who may fall within the taxation powers. Although it features in the Bill, money laundering is a separate matter, with which the director may not be directly connected. I see that the Minister is nodding.
 My hon. Friend is absolutely right. The Bill is not directly concerned with criminal investigation. As I said to the Minister earlier, I am worried that the director is being given a series of powers to obtain information that are, on the face of it, greater than those of standard law enforcement agencies. That is, however, difficult to know unless we examine the matter in great detail, and the Minister may be able to help us to do that. I would be grateful for his contribution and the expertise of his officials. However, subsection 1(a) and (b) say that the director's information may be used for purposes of bog-standard law enforcement, rather than for his extraordinary functions.

David Tredinnick: My hon. Friend has put his finger on it. The Committee's worry should be that through the back door, we might be giving much greater powers than were intended. Although the provision
 may appear innocuous, it could translate into a substantial increase of law enforcement powers.

Dominic Grieve: I agree. It is important to read subsection (1) in its entirety. Paragraphs (a) and (b) can easily be disassociated from the exercise of the director's functions mentioned in paragraph (c)that is obvious. Paragraph (d) refers to
the exercise by the prosecutor of functions under Parts 2,3 and 4,
 but those parts are directly linked to offences that are committed for the obstruction of the exercise of those functions. Paragraph (e) refers to 
the exercise by the Scottish Ministers of their functions under part 5,
 and paragraph (f) refers to 
the exercise by a customs officer or a constable of his functions under Chapter 3 of Part 5.
 Paragraph (g) is about the safeguarding of national security. However, that has always been such an important issue that it may fall within a wholly exceptional category, so I do not have too much trouble with it. Paragraph (h) relates to investigations outside the United Kingdom, where a completely different problem arises. However, it is linked to the director's functions, rather than being outside them. Paragraph (i) mentions 
the exercise of a designated function,
 which raises the possibility of a future statutory instrument, although I shall leave that to one side. 
 My hon. Friend is correct to say that paragraphs (a) and (b) have nothing to do with the director's functions. I want a debate on why they are in the Bill, and I hope for an explanation. What are the consequences for law enforcement? I apprehend that if the director is given a power that might be greater than those of the law enforcement agencies, the agencies will exert pressure to be able to use his information when they cannot get the information for themselves. That would not be good for the director or for law enforcement, and it is not a good thing for this Parliament to legislate for.

David Tredinnick: My hon. Friend has unearthed a plot. Does he suspect an ulterior motive that has been disguised from the Committee? He has fingered something very important.

Dominic Grieve: I am not sure whether I would describe it as a plot. After all, one can read it in the Bill. However, the power is not covered by the Bill's described purpose. From that perspective, it is an unusual power, and it widens the scope of the Bill, even as the Minister described it on Second Reading. Important issues are attached to paragraphs (a) and (b), and I would be grateful to hear the Minister's justification for them, so that we can decide whether we wish to allow them to remain in the Bill, or whether we will object to them.

Alistair Carmichael: I am grateful to the hon. Member for Beaconsfield for tabling the amendments. They are very useful, and strike at a fundamental concern that I have felt throughout the Committee's deliberations on the Billthe issue of the cross-contamination between the civil functions, as laid out for the director and the Government agencies, and the criminal functions.
 In earlier sittings, we gave fairly wide-ranging, swingeing powers to the director and other officers for the recovery of articles and for conducting investigations under civil procedure. I was happy to go along with that because we were dealing with civil procedure, not with something that would deprive someone of their liberty. That is an important distinction. 
 We have the Minister's assurances that there is a hierarchy of prosecution, recovery and so on, but that does not appear in the Bill. We were told that it cannot appear there because of drafting problems--I never quite understood what they were. I am concerned that by including subsection (1)(a) and (b) we open a back door and provide extra powers for law enforcement agencies. 
 In my experience, if a back door is opened, someone will use it. Perhaps not immediately, but eventually, the hard cases that make bad law will occur. Law enforcement agencies will pressure the director of the Assets Recovery Agency to use the provisions. I believe that that is wrong, and I would never have agreed to many of the things that I have agreed to elsewhere in the Bill if they had related to law enforcement. That is a step too far for criminal procedure. 
 When I look down the line at how the Bill will be regarded by the courts in a few years, I foresee massive problems with cross-contamination. I can envisage appeal case after appeal case being brought on points concerning the admissibility of evidence, and it will be asked how the director came to exercise those functions in the first place. To answer the point put to me earlier by the hon. Member for Glasgow, Pollok, we do not promote the cause of law enforcement by providing the enforcers with back-door powers. If we take the view that the police, Customs and Excise or any other law enforcement agency should have those powers, we should give them to them expressly. We should not do it by the back door. The Government are heaping up problems for the future. 
 The Chinese walls between the functions of the Assets Recovery Agency and the criminal prosecution authorities are important. It was because of them that I expressed concern earlier that the Lord Advocate was to be given the functions in Scotland. In Scotland, all those involved work in the same building, and the whole set-up would become far too incestuous and would lead to profound difficulties. 
 I hope that the Minister will give serious consideration to the points raised by the hon. Member for Beaconsfield about the inclusion of these provisions. There is a great deal of force in the argument that there should be a much more effective separation of powers than there will be if they remain part of the Bill.

Bob Ainsworth: Before I respond in detail, may I say one thingnot to score points, but to put something on the record? I accept that this is a serious Committee issue, but we have agreed to cull time in Committee. The Opposition know the gravitas of their various amendments, so it is pretty ridiculous to waste time in Committee so that we wind up at this time of the day
 moving on to deal with substantial issues that need proper consideration, with yet more amendments. The Opposition have some responsibility to use time in Committee in an appropriate way, and not to deprive us of the opportunity to consider the later amendments properly. The hon. Member for Spelthorne has spent a lot of time on earlier amendments. Other members of the Committee objected to that. We now have just over an hour before the knife falls, and we still have very serious issues to consider.

David Wilshire: The Minister said that he wanted to put something on the record, but that cannot go unchallenged. Whatever may have taken place this morning, he must accept that it was in order, because the Chairman allowed it to happen. The Opposition did not impose the timetabling mechanisms for the Committee. Indeed, the hon. Gentleman will probably be aware that we objected to that timetabling. The time limits were the Government's proposals, and they had a majority. The Minister may not like what is happening, but it is not for him to pick and choose, but for the Opposition to question him. Surely to goodness he has the good grace to accept that we will be the deciders of our own tactics.

Bob Ainsworth: Absolutelyand I am exposing the consequences of those tactics. It is true that the Opposition object to timetables in principle, but there was much discussion, much agreement and much flexibility. Changes were made whenever they were requested.

Alistair Carmichael: Will the Minister give way?

Bob Ainsworth: I do not want waste time now talking at length about this matter.

Alistair Carmichael: My question is short. Will the Minister be more specific about what he means when he refers to ''the Opposition''?

Bob Ainsworth: I aim nothing at the hon. Gentleman or his party; I am talking about the Opposition Whip.

Mark Field: Will the Minister give way?

John McWilliam: Order. Can we deal with the amendment?

Bob Ainsworth: Yes, Mr. McWilliam. I shall not give way to the hon. Gentleman.
 Amendments Nos. 609 and 610 would delete subsection (1)(a) and (b), which allow the director to disclose information for the purposes of criminal investigation or criminal proceedings. Amendments Nos. 621 and 622 would do the same in respect of the Scottish clause. Amendment No. 617 would restrict the disclosure of information by the director for the purposes of a criminal investigation to cases when a criminal investigation was being carried out, whereas the clause currently allows for disclosure when a criminal investigation may be carried out. 
 The director will require statutory authority to enable him to disclose information. The clause provides that authority. It gives the director the power to disclose information for certain specified 
 purposes, subject to restrictions that are already set out in the clause. The provisions for the disclosure of information by the director under the clause and the equivalent Scottish provisions under clause 427 in relation to criminal investigations and criminal proceedings mirror the provisions under section 17(2)(a) and (b) of the Anti-terrorism, Crime and Security Act 2001. They apply to disclosures that may be made under, for example, the Harbours Act 1964, the Employment Agencies Act 1973, the Consumer Credit Act 1974 and the Estate Agents Act 1979. 
 The provisions allow the director to disclose information that he has obtained, or which has been obtained on his behalf, in connection with the exercise of his functions, if the disclosure is for the purpose of any criminal investigation that is being or may be carried out, whether in the United Kingdom or elsewhere, and any criminal proceedings that have been or may have been started, whether in the United Kingdom or elsewhere. 
 It seems likely that in exercising his functions in criminal confiscation and civil recovery investigations, the director will come across information that relates to criminal conduct. Indeed, that seems inevitable, given his focus on criminally or unlawfully acquired property. 
 As we have made clear from the outset, the Government intend that prosecution should be the primary goal. We recognise that the director's investigations may bring to light information that would be relevant to a criminal investigation, as in the case of a civil recovery or confiscation investigation. In such cases, the director must be able to refer the information to the law enforcement agencies, which might involve the suspension of his civil recovery investigation if the information involved related to the property being considered for civil recovery. That was set out in the paper that I made available to the Committee before our consideration of part 1 of the Bill, in which we outlined how we envisaged that the director would exercise his functions. 
 We are considering whether the director should also be able to disclose information for the two other purposes specified in the Anti-terrorism, Crime and Security Act--initiating or ending such a criminal investigation or proceedings, and facilitating a determination of whether such an investigation or proceedings should be initiated or ended. It is not clear that the power to disclose available to bodies covered under that Act should be wider than the power available to the director. If we reach that conclusion, I intend to table amendments on Report.

Alistair Carmichael: The Minister's comments seem to reinforce further the argument for specifying the hierarchy in the Bill. Does he understand the practical implications of his comments for the director and the criminal law investigation authorities? He seems to be saying that if the director comes across information that should give rise to criminal proceedings, he must slam on the
 anchors, and it will go to the criminal investigating authorities, which may or may not proceed with it. The point at which the director's investigations conclude will be a grey area. That is heaping up trouble.

Bob Ainsworth: I understand the hon. Gentleman's point, and I am not trying to detract from the issue that may be involved.
 When information is passed on for criminal investigation and a prosecution is subsequently brought, nothing in the Bill cuts across people's rights in respect of self-incrimination. If an attempt were made to use information gained under the director's investigating powers in that way, case law would protect the person involved against its inappropriate use. That is what will happen in the case of evidence. 
 In dealing with information that will not necessarily be used as evidence but subsequently becomes part of a criminal investigation--the ''bog standard'' criminal investigation, as the hon. Member for Beaconsfield described it--all the director's powers are subject to judicial approval. He must satisfy that judicial authority that he requires the information in order to carry out functions in which he is currently engaged. That safeguard is provided. He cannot simply acquire information in order to pass it on to law enforcement agencies for use in prosecution. 
 We intend the hierarchy to operate. All Committee members want that. The public would think that we were putting ourselves in a strange position if we set up a situation in which an agency that was pursuing the proceeds of crime came across information clearly relevant to a prosecution, yet could not pass that information to the prosecuting authorities because we had banned it from doing so. I am unsure whether the public would understand why that should happen. There are many circumstances in which other people and organisations are obliged to do that. Should we ban the director from doing that, when there is judicial oversight of all the powers that he has been given? We are addressing a substantive issue, but we ought not to go down the route that has been suggested.

Dominic Grieve: Yeah?

George Foulkes: How is Hansard going to report that?

Dominic Grieve: As an exclamation, perhaps.
 I listened carefully to the Minister's remarks. He persuasively made an important point. I agree with him that it would be a little odd if the director's investigations were to unearth information that could have been disclosed to another law enforcement authority during the ordinary course of its investigations, but the director was precluded from disclosing it. That could result in a failure to alert the law enforcement authority to important information with regard to the prevention or prosecution of a crime, and it could lead to additional costs, as that authority would have to search for that information independently. There is a logic to the Minister's argument. 
 However, there is also a problem with it. We are setting up a system that is acknowledged to be for a specific purpose--indeed, I have described it as a parallel system of justice. That is one of the reasons why I had concerns. That system is specifically targeted at money, and it specifically gives the director extraordinary powers that are unusual--if not, in some cases, novel--under our legal system. 
 Because they exist, those powers will be used. I fear that they will begin to be used very frequently, and for a purpose for which they were not principally intended, which will enable law enforcement agencies to obtain information that they would not otherwise have been able to get.

Alistair Carmichael: Would the hon. Gentleman care to comment on the Minister's revelation that, apparently, such information will be inadmissible, in accordance with case law? Welcome though that concession is, there is nothing in the Bill that indicates that case law continues to apply hereand as this will be an Act of Parliament, it would trump the previous case law.

Dominic Grieve: Two issues are at stake. First, I am not satisfied with what has been said about the information not being used as evidence. If it were capable of being passed to the other law enforcement agencies, they could gather evidence based on that information. That is not a good factor, and it is the one that worried me most. I should like to hear more from the Minister about the fact that nowhere is that spelled out in the Bill. There are provisions under which specific questions asked of an individual cannot be used, because of the protection against self-incrimination. Although people may be required to answer such questions, their answers cannot be used against them. I accept that under those provisions, such matters could not be used as evidence in a criminal prosecution. To that extent the Minister may be right, but that does not get away from the fact that it is still information that other law enforcement agencies would not otherwise be able to obtain.

Mark Field: I entirely agree with my hon. Friend that the Bill will set up a parallel system of justice. Will he say how that marries with the Minister's assertion that there would still be a strict hierarchy? It has been asserted that the agency will play a part in the hierarchy. However, the nub of our argument is that there will be a parallel systemand, clearly, an opportunity for abuse.

Dominic Grieve: The difficulty is that the hierarchy envisages that the first thing is to consider prosecution. That is the top end of the hierarchyyet oddly enough, that is not where the most power lies; the most power lies lower down the hierarchy, and is given to the director for the purpose of confiscating assets or civil recovery. On the face of it, he will have powers that are wider than those of any other enforcement individual or authority in the land. He will be a powerful figure in the obtaining of information and the ability to use it for a specific purpose.
 It strikes me that there is a direct conflict between the hierarchy and the way in which power is disposed. Although prosecution is at the top of the hierarchy, it is lower down the hierarchy that the most investigative 
 powers will be provided. Yet the Minister is asking the Committee to approve a clause that will allow information obtained for a purpose lower in the hierarchy to be fed back up to the top.

Ian Lucas: Can the hon. Gentleman assist me by specifying what mechanism will come into existence whereby the steps taken by the director of the Assets Recovery Agency to obtain information will be passed on to other law enforcement authorities? Is he seriously suggesting that they will put pressure on the director to use the procedure?

Dominic Grieve: Pressure will not be needed. Let us suppose that the Crown Prosecution Service investigates a major crime and it cannot find the evidence, but thinks that money laundering is going on. Although it cannot bring proceedings, it tell the directora perfectly legitimate processwho carries out his investigation. During that investigation, by using his powers the director may find the evidence that the CPS has not been able to lay its hands on and feed it back to the CPS. He will then, quite unwittingly in a sense, have acted as the CPS's own investigator to obtain information under our unwritten constitution, which is the power that we give to prosecutors. The CPS will then start the wheels grinding again. It is a serious issue.

Alistair Carmichael: The sound scenario that the hon. Gentleman outlines carries a further problem. It leaves as the arbiter of what constitutes grounds for investigation and criminal proceedings staff of the director of the Assets Recovery Agency, who will not necessarily be qualified to do that work. In that sense, the interests of justice will not be well served by the provision.

Dominic Grieve: I entirely agree. The hon. Gentleman makes a good point. The matter will be in the hands of those whose prime responsibility is asset recovery. The Minister has properly and repeatedly emphasised that we are discussing asset recovery legislation and a system not of sending people to prison or giving them criminal convictions but of depriving them of assets. It is accepted that that will be done on a non-criminal test in some circumstances in which people already have convictions but the money involved is not necessarily linked to that conviction, and in circumstances in which no criminal conviction is involved and extraordinary powers are given that override some of the usual safeguards in our legal system.

Bob Ainsworth: So that we stay on the issue at hand, I should like to make a couple of things clear. The director does not have powers in relation to money laundering. He can use his powers only for his functions in confiscation and civil recovery.
 The hon. Gentleman referred earlier to my statement about use of evidence being specified in the Bill. I apologise for having taken some time to find the reference. I refer him to clause 349(1), in which the director's main additional power--the disclosure power--is specified: 
A statement made by a person in response to a requirement imposed on him under a disclosure order may not be used in evidence against him in criminal proceedings.
 Overriding provisions on perjury are referred to later in that clause.

Dominic Grieve: That is precisely why I said what I did in response to the hon. Member for Orkney and Shetland (Mr. Carmichael). I knew that we had considered safeguards. However, the Minister must accept that that does not prevent the passage of information. It prevents the use of that information as evidence.
Mr. Ainsworth indicated assent.

Dominic Grieve: As the Minister nods, I believe that we agree about that.
 We face a conundrum, and it is difficult to see a middle way out of it.

Mark Field: A third way.

Dominic Grieve: On the whole, I am not inclined to third ways. They do not seem to have got us very far in the past five years.
 I considered whether it might be possible to draft subsection (1)(a) and (b) so as to highlight the nature of the problem and ensure that the only information disclosed was information that could be obtained by the law enforcement agency with its own powers. If the Minister were to consider whether that might be a practical way to proceed, we could have a further discussion on Report, and it might commend itself to me. 
 I am trying to be helpful. I accept that there is a problem. Considering some examples, it might seem absurd to outsiders that the director will be unable to communicate information. However, although there may be an element of absurdity, as the Bill has been drafted for a specific purpose, my inclination is to delete paragraphs (a) and (b). We have established a director and given him specific powers for that purpose, not for general criminal investigation. The Minister is right to say that my earlier money laundering example was a bad one. Although money laundering is in the Bill, it has nothing to do with the director. Arguably, it should not be in the Bill at all, but it has been put in for the purposes of Government legislative timetabling. 
 That granted, my inclination is to take out paragraphs (a) and (b) and live with the consequences, because I am not happy about them. The provisions will raise huge problems that might ultimately undermine the director's credibility. His purpose could well be subverted and he could be used--although not deliberately--as an investigative agency for the law enforcement authorities. That worries me for a host of reasons. It could lead to a great many challenges under the Human Rights Act 1998. 
 We may regret leaving in the paragraphs, but that said, I am not unmindful of the Minister's problem. If I could see a way out of it that did not involve the elimination of the two paragraphs, I would be 
 receptive to it. However, at the moment, I am inclined to press the amendment to a vote.

Bob Ainsworth: Before the hon. Gentleman does that, let me intervene on him. I do not think that there is a problem with evidence. I think that we are correct on that issue. [Interruption.] I am not dead sure that the hon. Member for Orkney and Shetland is altogether with me on that.
 The subject is worthy of further consideration and I am happy to provide it. I am not absolutely clear that the problem is not covered by the judicial approval that is required in the first place for the director's powers. I give the hon. Member for Beaconsfield an assurance that I will consider his points further and give him the opportunity to return to the subject, if he wishes, on Report. I shall reflect on whether I am satisfied that the point is covered by that judicial oversight. If it is not, I shall consider whether there is a way for us to cover it. I am glad that he spoke as he did, because it would be a real dilemma for us presentationally if we were to prevent information from being passed on to the prosecuting authorities. The issue is worthy of further reflection. 
Ian Lucas rose

Bob Ainsworth: I give way to my hon. Friend. Oh no, I cannot, I am interveningat length.

John McWilliam: At excessive length.

Dominic Grieve: I wonder whether, as another hon. Member wishes to contribute, it would be proper for me to sit down. Perhaps I can resume my speech later.

Ian Lucas: I am grateful for the Minister's suggestion. I wonder whether, as a middle way, we could have judicial consideration of whether the information should be transferred; it should not be assumed that it always can be. Instead, there could be judicial consideration of, for example, the gravity of the information. It would be a major step for someone to suppress information relative to a serious crime and not pass it to investigating authorities. I hope that a middle way can be found, because in certain circumstances it would be right and proper for the information to be passed on, although I respect the views propounded by the hon. Member for Beaconsfield.

Bob Ainsworth: I thank my hon. Friend. I shall not try to respond to his suggestion off the top of my head. I thank the Committee for the way in which it has addressed the point, and I reiterate my commitment to a further consideration of it. In view of that, I hope that the hon. Member for Beaconsfield will withdraw the amendment.

Dominic Grieve: I am faced with a slight dilemma. I am minded to withdraw the amendment. My anxiety is that I do not know how long will be allocated to the issue on Reportor how many points about it the Minister will want to considerand there is always a lurking anxiety that we might end up not voting on it, even if I wished to delete it.

Alistair Carmichael: It will have two days.

Dominic Grieve: That is what I expected the Minister to tell me, but he knows how swiftly two days can pass.

George Foulkes: Indeed.

Dominic Grieve: That causes me serious concern. I am hesitating because I am unsure whether to press the amendment to a Division.
 I have decided to do that, so that opinions can be fully recorded. I hope that the Minister will forgive me: my decision does not detract from my wish to be conciliatory, because I acknowledge that he faces a genuine problem. However, as he has not yet solved it, the appropriate course of action is to cut the Gordian knot--rather than to try to unravel it. 
 I wish to press the amendment to a Division--if only for symbolic purposes. 
 Question put, That the amendment be made:--
The Committee divided: Ayes 6, Noes 13.

Question accordingly negatived.

Dominic Grieve: I beg to move amendment No. 611, in page 246, line 2, leave out paragraph (h).

John McWilliam: With this it will be convenient to consider amendment No. 623, in clause 427, page 248, line 33, leave out paragraph (g).

Dominic Grieve: Paragraph (h) refers to
investigations or proceedings outside the United Kingdom which have led or may lead to the making of an external order within the meaning of section 432.
 Subsection (2), which refers to interpretation, states: 
An external order is an order which--
(a) is made by an overseas court where property is found or believed to have been obtained as a result of or in connection with criminal conduct, and
(b) is for the recovery of specified property or a specified sum of money.
 That statement is of relevance to the Committee's debate on the penultimate amendment. The key issue is whether the director--or anyone else--can maintain control of information once it has been passed outside this country's jurisdiction. It raises important points, about which the Minister might be able to provide reassurance. 
 I appreciate that, if there is to be an international regime for seizing the proceeds of crime, information will have to be exchanged between police authorities, directors and others to achieve that. However, as has been discussed, the Bill deals with information that, by its nature--particularly in relation to the Inland Revenue and Customs and Excise--will have been obtained from individuals in confidence and is subsequently passed to the director. What control 
 could be maintained of such information if it were subsequently passed to an overseas organisation? 
 The answer might ultimately depend on how the guidelines are drawn up. Therefore, it would be helpful if the Minister were to comment on what is envisaged with regard to international co-operation. With which countries is that co-operation likely to take place, and what safeguards will be present to ensure that information is not misused or used in a way that is contrary to the aims of the Bill?

Bob Ainsworth: An external order is defined in clause 432 as an order that is made by an overseas court where property is found, or believed to have been obtained, as a result of, or in connection with, criminal conduct. The order would be for specified property or a specified sum of money. The provisions that allow for co-operation in respect of such orders are in part 11.
 Allowing disclosure for the purpose of investigations or proceedings outside the United Kingdom that have led, or may lead, to the making of an external order will enable the United Kingdom to co-operate with overseas authorities. If we expect other authorities to co-operate with us in the fight against crime, we must be prepared to co-operate in their investigations into whether property has been obtained as a result of, or in connection with, criminal conduct. 
 For example, the director may obtain information about a person's property or finances that indicates that they were obtained through criminal conduct. That information may not be relevant to the director's investigation because it may relate to property that is held overseas, which he does not wish to pursue. However, the information could be relevant to an overseas investigation with a view to obtaining a court order to recover the property, or for proceedings already in train. In those circumstances, we should be capable of disclosing information because, as I said, it is important that we may co-operate with our international partners to recover the proceeds of crime. 
 It would be odd if the United Kingdom were able to assist an overseas authority or court to give effect to an external order, but could not assist by providing information about investigations or proceedings that were relevant to the order. That might affect the willingness of the overseas authorities to pass on information to our own law enforcement authorities. 
 Restrictions on the disclosure of information by the director will apply before he may disclose information, and we discussed some of those during the debate on clause 422. Any information that is disclosed by the director or a permitted person may be made subject to restrictions on onward disclosure. 
 Under clause 423(8), a disclosure may not be made that contravenes the Data Protection Act 1998 or that is prohibited by the Regulation of Investigatory Powers Act 2000. It is implicit that the provisions of the Human Rights Act 1998 must be taken into account before the director makes any disclosure. 
 We are playing an active role in trying to encourage international co-operation in the investigation of crime, and that is a proper role for the British Government. The provisions are in line with that. We must take the growing international dimension of criminality all too seriously, and for those reasons I ask the hon. Member for Beaconsfield to withdraw the amendment.

David Wilshire: I listened carefully to what the Minister said, but he did not persuade me, because I have serious concerns. I am glad that reference has been made to human rights, because it would have been possible to mention those during one of our discussions on an earlier amendment. However, none of us did, and subsequently Mr. Gale indicated to me informally that he was not minded to have a clause stand part debate, which would have enabled us to raise the issue. I am therefore grateful to the Minister for referring to it, because it must be debated at some stage today. Whatever may be thought about the contributions that have been made to the debate, this is one of the most substantial issues of the day.
 It will not wash to say that the director can place restrictions on the onward transmission of information. Once the information is out of the jurisdiction of the United Kingdom, there is nothing whatever that the director, a British court or anyone else can do about it. It is outside our control. [Interruption.] The Minister shakes his head. Will he tell me how it is possible under the Bill to control a foreign jurisdiction?

Bob Ainsworth: We do it all the time. We extradite people from foreign jurisdictions on the grounds that they will not be onwardly extradited in certain circumstances.

David Wilshire: Perhaps that does happen, and works on the basis of assurances. The Minister said originally that it was implicit that human rights would be taken into account. Labour Members have made great play of extending human rights legislation, and they will agree that human rights are important. Respect for human rights should not be implicit in the Bill, but explicit. Will the Minister say what safeguards are in the Bill? If human rights were important, would it not be sensible to restrict the foreign authorities to which any information could be passedto signatories to the European convention on human rights, for example?

Bob Ainsworth: The Data Protection Act 1998 prohibits the disclosure of information outside the European Economic Area unless the discloser is satisfied that the information will be properly protected in the country to which it has been sent.

David Wilshire: I need to think about the implications of that for a moment. If I remember correctly, we were told this morning that nothing we were doing would override the workings of the Data Protection Act. If that is so, why do we need such provisions, because safeguards are in place anyway? We are now duplicating measures. The Minister cannot have it both ways: one minute he says that such measures are
 implicit in the Bill, and the next minute he says that they are explicit. Which is it?

Bob Ainsworth: Information cannot be disclosed unless we give the director the power to disclose it.

David Wilshire: I have to accept what the Minister says, but I am not persuaded. When he has his wits about him, perhaps he might say in a more general way whether he is entirely satisfied that human rights will be respected in such cases. What measures will he take to ensure that before information is disclosed, inquiries are made into whether the regime seeking the information can be trusted to use it lawfully?
 We have all accepted that the measures will set up an investigation and give someone powers that are not usually held. I foresee a possible problem. When a police force in one country seeks information from another police force, the channels of communication, safeguards and restrictions are well known. The track record of the foreign police force in respect of legislation that affects the British law enforcement agencies will have been tried and tested. However, on our own admission, the director will be in possession of information that could not be obtained from a police force. Before I left the Committee to go into the Chamber for a moment, it was very much the issue of debate that the authority had powers greater than those of the police. 
 The Minister can bob up and say that clause so-and-so says that that will not happen, but when the Bill is enacted, a foreign police force will have a route whereby it could obtain information that it would not be able to obtain through its usual channels. How are we to know for what purpose the foreign police force really wants the information? This is a serious matter. I hope that the hon. Gentleman accepts that I am not in any way trying to waste his time. I seek assurances from him about handing over to foreign authorities matters over which we have no control, implicit or explicit.

Dominic Grieve: There was an interesting point during the dialogue between my hon. Friend the Member for Spelthorne and the Minister. The Minister mentioned the Data Protection Act 1998, which provides explicit safeguards for data, although such a safeguard is not explicitly spelt out in the Bill. However, I accept the hon. Gentleman's express word that if we asked for an assurance, he would expect it to be met. I wondered why we could not include such a provision. [Interruption.] If I am wrong, maybe the Minister can identify where the provision is in the Bill, because it is clearly not in this part of it.
 I see that somebody is passing a note to the Minister, so he will soon be able to tell me where the provision is.

Ian Davidson: It is a shopping list.

Dominic Grieve: Or perhaps the Minister has been told that the provision is not there.
 My hon. Friend the Member for Spelthorne elicited a good point from the Minister. As the Data Protection Act 1998 contains an explicit statement, 
 should not such a statement also be in the Bill? If there is none, will the Minister consider including one?

Bob Ainsworth: The reference that comes to mind relates to Scotland, and is in clause 425(3). However, that is repeated in other parts of the Bill. Nothing authorises the disclosure of information in contravention of the Data Protection Act or the Regulation of Investigatory Powers Act 2000. We have discussed that. My note tells me that we do not envisage that outward disclosure would involve information other than that covered by the Data Protection Act.

Dominic Grieve: I think that the Minister has answered my question. I confessI have learned this during the passage of the Billthat I had assumed that there would be categories of material entering the director's hands that might not be covered by the Data Protection Act or part 1 of the Regulation of Investigatory Powers Act. I may be wrong about that. If the Minister reassures me that that will not be the case, he has answered part of my question.

Bob Ainsworth: We do not envisage that there will be information not covered by the Data Protection Act.

Dominic Grieve: I am grateful to the Minister. I had assumed that some material might not be covered, although I thought that most of it would be. I may think further about the issue, but in the light of the Minister's comments, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Dominic Grieve: I beg to move amendment No. 612, in page 246, line 5, leave out paragraph (i).

John McWilliam: With this it will be convenient to take amendment No. 636, in page 246, line 27, after 'nature', insert
'directly relevant to the purposes of this Act'.

Dominic Grieve: There are two amendments, one of which refers to England, Wales and Northern Ireland, and the other to Scotland. Amendment No. 612 would delete subsection (1)(i), which provides that information may be disclosed based on
the exercise of a designated function.
 I want clarification from the Minister. I presume that the paragraph relates to the exercise of a function that is yet to be designated. I am not happy about that. We return to the point about statutory instruments giving new powers to the director, which has a series of knock-on consequences on his ability to disclose information subsequently. I have explained to the Minister that I am anxious about that, and I shall not repeat my views about legislation by statutory instrument. Will he confirm that that is what is intended by the paragraph, and tell the Committee how the provision will operate?

Bob Ainsworth: In the note that I circulated to the Committee, I made it clear that the order-making power in subsection (9) exists because new purposes for which disclosure should be permitted may emerge over time. It is therefore sensible to include the order-making power.
 In the light of the need for such a power, it is clear that the director would need to be able to disclose information for any new functions listed under the order. Amendment No. 612 would not allow that. Amendment No. 636 would ensure that when making an order, the Secretary of State would have to be satisfied that the function for which disclosure was to be permitted was not only of a public nature but also directly relevant to the purposes of the Bill. 
 We are not convinced that amendment No. 636 would make a useful addition to subsection (9). We believe that it is proper that any addition to the list should relate to the exercise of public functions, but we do not accept that those functions need necessarily relate directly to the purposes of the Bill. The order-making power under subsection (9) is subject to the affirmative procedure, which will allow both Houses to scrutinise the Secretary of State's use of the power if and when he exercises it.

David Wilshire: Did I hear the Minister correctly? Did he say that any public function should be covered by the provision, and that it does not have to be a function that is relevant to the purpose of the Bill? If so, I am appalled and alarmed. I thought that the purpose of the Bill was to focus on the proceeds of crime. The hon. Member for Glasgow, Pollok has made the point time and again that it is crucial that we focus on that issue, but I thought that I heardI hope that the Minister will tell me I am wrongthat the Secretary of State can involve any public function that takes his fancy by order, rather than by legislation.
 We have repeatedly heard the word ''believes'', and now we have the word ''thinks''. I wonder why the word is not ''believes'' on this occasion, because that is what was used in the past.

John Robertson: He believes he thinks.

David Wilshire: Yes, we could have both. We could have a belt-and-braces job, with ''believes'' and ''thinks''. It does not really matter.

George Foulkes: I know that it is in order for the hon. Gentleman to reveal his ignorance to the Committee, but is it really wise? This morning he spent half an hour suddenly discovering that the director had powers of taxation, which we spent a whole day discussing only a month or so ago.

David Wilshire: There are two answers to that. First, I have long since stopped worrying about my ignorance; I would not have got very far if that had occupied my mind too much. Secondly, better the sinner that repentethand discovers such things at the last minute, rather than not at all. [Interruption.] I would have hoped that the Minister, who is saying that I am taking up his time, had spent a productive day. He will have done if he has managed to educate a poor demented Conservative Member of Parliament who does not understand such things. That would be time well spent.

George Foulkes: I have spent my day quite well, because I have been doing some statistical analysis. We had a little legal debate earlier, as the hon. Gentleman
 may recalland we have found that Labour members of the Committee have 71 years' experience practising at the Bar or as solicitors, whereas Opposition Members have only 29 years.

David Wilshire: I hope that the Minister has taken into account the many years that I have spent practising at the baralthough mine was the Pig and Whistle rather than the Old Bailey; I am not sure which he is counting. [Interruption.] It was not me who went down this route; I was raising what I consider to be a particularly serious matter.

Ian Davidson: I am quite enjoying the badinage between the Minister and the Opposition Whip, but is it significant that the hon. Gentleman has looked at the Annunciator several times to check how long he must go on speaking? Is that part of a deliberate delaying tactic to ensure that we do not debate all the clauses that are up for discussion before the guillotine falls? Will he clarify whether that is a strategy or self-indulgence?

David Wilshire: I hope that you will allow me to answer that, Mr. McWilliam, although it is not necessarily relevant. I have indeed looked at the monitor more than once, for the simple reason that while I was away I was in the Chamber, and there were difficulties and issues about the progress that was being made. I was anxious to see whether the arrangements that I had put in place had succeeded. The hon. Gentleman is right: I was looking at the monitor, but not for the reasons that he thought.
 I am anxious that the Minister should explain why he believes it right to go beyond the functions that are strictly relevant to the Bill. A subjective test is applied: if the Secretary of State believes something to be true, lo and behold, it is. As I have said before, I do not like that. The Minister can have another go at persuading me that I am wrong.

Bob Ainsworth: The Minister has no desire to try to persuade the hon. Gentleman, who keeps popping in and out of the Committee, and does not know what we are talking about.

Dominic Grieve: That comment was rather uncalled for.

George Foulkes: It was true.

Dominic Grieve: The participation of hon. Members on both sides of the Committee throughout our deliberations seems to me to have enhanced our discussions. Although I am the first to accept that at times hon. Members may have got the wrong end of the stick, I prefer that to having no discussion at all.
 The comments of my hon. Friend the Member for Spelthorne were perfectly reasonable and valid. Opposition Members' dislike of government by statutory instrument, with possible knock-on consequences in the case of subsection (1)(i), is perfectly reasonable and is a legitimate subject for debate. We discussed the matter extensively today when we debated an earlier issue, and it was proper to raise it in relation to subsection (1)(i), but I shall not press the amendment to a Division. I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn.

Dominic Grieve: I beg to move amendment No. 613, in page 246, line 6, leave out subsection (2).
 We now turn to a further issue that relates to subsection (2). I should like the Minister to make clear the relationship between information obtained by the director in connection with his functions under part 6, and information that he obtains in connection with his other functions. My intention was not to delete the provision but to highlight it by proposing its deletion so as to enable us to discuss it. 
 An assumption is made about the compartmentalisation of the director's activities, which, on the basis of what the Minister said earlier, will not happen. The brief will be transferred to the director and he will be told, ''We can't prosecute this chap--can you see what you can do about it?'' He will start collating information in order to find out whether he can bring confiscation proceedings, if previous convictions are involved, or civil recovery proceedings, or--the Minister said that this is likely to be the ultimate fallback position--in the event of his failure to do either of those, tax. Part 6 deals with taxation. 
 In such circumstances, how will subsection (2) work? Although it properly excludes material that the director has acquired for the purposes of carrying out his Revenue functions, at least some of that information may have been obtained in exercising his powers in connection with the other functions. 
 What will subsection (2) mean in practice? It is unclear. I suppose that it might be argued that if all that the director ultimately does is impose tax, no information can be disclosed. However, as his examination will be on-going, and as he may want to exchange information with other authorities as he proceeds, I am at a loss to see how it will be possible to extrapolate which information he has obtained for his Revenue functions and which for his other functions. In that case, how is the clause to be interpreted?

Bob Ainsworth: The amendment would remove subsection (2). That subsection, together with subsection (3), prohibits the disclosure of any information obtained by the director using his Revenue functions under part 6, except to the Commissioners of Inland Revenue or to the Lord Advocate for the exercise of his functions under part 3. Amendment No. 613 would allow the disclosure of tax information for the purposes set out in clause 423(1).
 The Inland Revenue holds particularly sensitive information about people in connection with its tax functions. The director will obtain the same sensitive information when exercising his functions under part 6. Subsections (2) and (3) recognise the delicate nature of that personal information. The Inland Revenue rightly has particular restrictions on the disclosure of the personal information that it holds. It is therefore important that if Revenue information is passed to the director--or obtained by him in his Revenue functions under part 6--restrictions on its disclosure should apply to him, equivalent to those that apply to the Inland Revenue. 
 The disclosure of tax information obtained by the director when exercising his part 6 powers should be a matter for the Inland Revenue. That is what subsections (2) and (3) achieve. The director can pass information back to the Revenue, which will then decide whether it is within its powers to disclose it. I hope that, if read together, subsections (2) and (3) make that clear. For those reasons, I invite the hon. Gentleman to withdraw his amendment.

Dominic Grieve: I hope that the Minister will forgive me. I understand exactly what is intended, and I do not have any dispute with him. I echo every word that he has said about that matter. However, I have a worry that I do not think has been fully addressed. When the Revenue's function is transferred to the director and he starts an investigation, he may be able to obtain material that, although intended for tax purposes, could arguably be of direct relevance to the various paragraphs of clause 423(1). It may not be that easy to ascertain what information falls into which category. Has any thought has been given to that issue?
 Revenue investigators sometimes go out and ask questions. They may ask neighbours or employers for tip-offs, or ask other people for information. The Revenue has an intelligence network. Let us suppose that an investigator acquires information in the course of his questioning, and that the director, in exercising his Revenue functions, obtains information, intending 
 to use it for the purposes of tax, but the information is such that it could be used for other purposes. Must the director disclose that information only back to the Revenue, or is it information that he can use in another context? 
 I urge the Minister to think about the issue, because the distinction is not as clear cut as he thinks. Subject to his doing that, I will not press the amendment to a Division. I am trying to be helpful to the director, who might have to resolve a potentially difficult issue. The only possible answer that I can see is that if he believed that he was about to exercise a Revenue function, it would be impossible for him to disclose any information that he might obtain. I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn. 
 It being Five o'clock, The Chairman proceeded, pursuant to Sessional Order D [30 October 2001] and the Orders of the Committee [13 November 2001, 22 January 2002 and 29 January 2002], to put forthwith the Questions necessary to dispose of the business to be concluded at that time. 
 Clauses 423 to 427 ordered to stand part of the Bill. 
 Further consideration adjourned.--[Mrs. McGuire.] 
 Adjourned accordingly till Tuesday 5 February at half-past Ten o'clock.